The challenges of sustaining large arts venues

Large arts venues miss the point as they become more commercial to sustain themselves

Peter Dobrin, The Philadelphia Inquirer classical music critic, 5/19/15

Anne Ewers, [the Kimmel Center’s] upbeat leader, recently gave statistics on attendance, finances, and building use – up, up, up. Indeed, positive results of [its] business plan can be measured now that it has been in effect for several years. It earns 90% – an exceptionally high percentage for an arts group. What is the magic formula? In short, by becoming more commercial, the Kimmel has adopted a business model that underwrites the rents of its resident companies by presenting less art and more popular entertainment. Thus, it leans more lightly on philanthropy, which pleases the overtaxed donor community.
The benefits are real. The Kimmel charges the Philadelphia Orchestra a bargain-basement rent. It has taken a greater role in promoting the valuable work of its resident companies, co-presenting in some cases and advertising on their behalf in a more visible way than ever before. A more representative slice of the city racially, ethnically, and geographically is walking through the door.  But something has been lost – the visiting orchestra series is out, comedians and pop singers are in – and by becoming more commercial and less about the art, the Kimmel may be improving its bottom line (the budget will break even again this year), but it is doing less in the long term to grow audiences for the arts. It has become more about following public taste and less about leading it. It hasn’t hit on a new way of funding art so much as it has settled on a way to fund less art while stepping back from the mission of an arts center - to bring audiences art they never knew about.
Now the question before the Kimmel is the one every U.S. arts and culture group faces: how to pay for the art, which always requires a philanthropic subsidy, as society has become accustomed to getting entertainment on its own terms and free, and as generations raised without an arts education fail to filter into the audience base as quickly as the older ones who had that education cycle out.
The Kimmel has done a fine job [as a landlord, but] it has fared less well as a presenter. Bigger ideas have died. No longer do major recitalists like Lang Lang come through. The decision to jettison a visiting-orchestra series remains troubling. Ewers says she spent a year seeking funding but could turn up only half the $120,000 needed to save the series. “We didn’t have the attendance, and we didn’t have the funders. It broke my heart,” said Ewers.  I’m not convinced. Ewers has been terrific, leading the Kimmel out of debt while making improvements to the building, and, during an extended recession, through difficult negotiations with labor unions and resident companies. Philadelphia is lucky to have her. But here she gave up too easily. It’s simply not possible that a region of this size doesn’t have an audience to support four visiting orchestras per year. The Philadelphia Chamber Music Society showed what shrewd marketing could yield: When the Kimmel double-booked the Perelman this season, PCMS moved its Emanuel Ax concert to Verizon [Hall] and sold more than 1,400 tickets. For chamber music.
It may appear that booking commercial acts is simply giving people what they want. The Kimmel proudly notes that by polling various neighborhoods and communities about what they wanted, diversified offerings have attracted a diversified audience. But giving people what they already know does not necessarily serve their best interests. It’s no trick to match teens to a boy band, or Jerry Blavat to his fan base. The higher calling is to be an imaginative curator. When the Kimmel once again delivers the high school student from Grays Ferry to worlds he never knew by putting him in the same room with an orchestra from Leipzig, we will once again have a presenter operating at full potential.

Large arts venues are often unsustainable, so why do we keep building them?

Duncan Webb, The Clyde Fitch Report, 5/18/15

Last month I wrote about the frustration of fighting the often-irrational desire to develop large-capacity theaters. Now let’s take a few steps back to consider the basic challenges associated with building large-capacity halls. The idea that bigger is better is a fundamental. And in many sectors of the economy, it’s a valid starting point: more capacity increases revenue potential, which leads to more income, which can finance incremental capacity. But in reality it does not work that way. Simply put, the revenue potential of additional seats rarely exceeds the incremental costs of adding capacity. So there’s no income to finance the larger asset. More seats make the building more expensive to build and to sustain.
For large-capacity halls that are only in the business of presenting touring commercial entertainment (including Broadway shows), the more seats the better. But in reality, many large-capacity halls were originally conceived and funded to present touring cultural programs — classical music, dance, opera — and to support local arts organizations by being available for rent. And here’s where we get into trouble. There’s a gap between what you spend and what you make, a gap that tends to be larger as the operating costs of your facility increase with more capacity. [And] cultural organizations cannot afford anything like the rent necessary for full cost recovery. In fact, most nonprofit rental rates cover less than half of the relevant costs. Here again, that gap tends to widen as capacity increases.
The seating capacity argument often boils down to this: Should we build the church for Easter Sunday, or for the rest of the year? Do we care more about the occasional opportunity to bring a certain act or group to our community that needs more seats to sell? Or do we want a seat count and cost structure more in line with the market capacity and financial resources of our community? It has taken me a long time, but I finally accept the position that there are times and circumstances when a community can and should take the Easter Sunday approach — that the prospect of attracting high-profile events is the thing that gets people excited, and thus generous. But I still worry about the long-term sustainability of such structures.
Then there’s yet another problem: there is virtually nothing you can do to re-purpose a large-capacity hall for some other commercially viable use. And remember, the last thing you can do is shut down your large-capacity hall. Just in case there’s doubt about the risks of large-capacity halls, look at what’s happening in China. Developers and bureaucrats are building halls for Easter Sunday, knowing they will have moved upwards and onwards before the sustainability challenge comes home to roost. Already there are dark, empty halls hidden behind the smog. And many more to come.